Home ›› 28 Sep 2022 ›› Stock
Share prices of six out of eight companies with billion-dollar market capitalisations on Tuesday touched the floor prices on the Dhaka Stock Exchange.
The six companies are Grameenphone, Walton Hi-Tech Industries, British American Tobacco Bangladesh (BATBC), Square Pharmaceuticals, Robi Axiata, and Renata Limited.
United Power Generation and Distribution Company, and Beximco Limited are trailing the floor prices reintroduced by the Bangladesh Securities and Exchange Commission to stop a downward spiral of stock prices in July.
On July 28 this year, the securities regulator in its latest move had reintroduced the floor price for stocks that is still in place, a measure designed to curb the market volatility.
“Opening price of any listed security shall be set at the average of the closing price of July 28, 2022 and closing price of immediately preceding four trading days,” the BSEC said in its order.
“The average price, calculated for each security, will be considered as the floor price and the lowest limit of the circuit breaker,” it said.
“The latest action was taken in light of the recent global economic strains and to protect investor interests,” the BSEC stated.
Previously, the securities regulator took a similar step in an attempt to limit the free fall of share prices during the Covid-19 outbreak on March 19, 2020, when the DSEX fell below the 3,000-level.
When a floor price is fixed, no company’s shares will be traded below the fixed price. If the share price of a company is trading at the floor price, then that will be the lowest price of that company.
In addition, the BSEC said the upper limit of the circuit breaker and other existing conditions would remain unchanged.
Stock prices of Grameenphone—the top company by market cap—closed at Tk 286.6, which is its floor price. The market cap of the country’s largest mobile phone operator stood at Tk 38,699 crore as of Tuesday, making up 8.5 per cent of the total DSE market cap.
A company’s market capitalisation is calculated by multiplying the total number of outstanding shares with the current market price of its shares.
On July 28, the BSEC had intervened in the market by reintroducing the floor prices to curb price swings to stabilise the market. The average price, calculated for each security, is considered as the floor price and the lowest limit of the circuit breaker.
Walton Hi-Tech Industries’ share prices stood at Tk 1047.7, which is the company’s floor price. The market cap of the local electronic giant--the second biggest company by market cap—was Tk 31,737 crore.
BATBC’s stock prices closed at Tk 518.7, Square Pharma at Tk 209.8, Robi Axiata at Tk 30 and Renata at Tk 1303.2.
In time of the reintroduction of the floor price, BSEC Chairman Prof Shibli Rubayat-Ul-Islam had told that the commission had been forced to reintroduce the floor price for stocks just to protect the retailers as the country’s stock markets were teeming with retailers.
